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Current Market Conditions Essay

1860 words - 7 pages

Market StructureThe market structure component will examine market structure relative to who benefits, competition, pricing, non-price strategies, and suggestions to competitive. The market structures in which the automobile compete is pure competition. Automobiles are fundamentally the same; however, 201 different types of automobiles with 16 different manufacturers are located worldwide. This market structure is good for consumer in terms of pricing as the competition increases competitive pricing pressures (The Mackinac Center for Public Policy (2001). The non-price strategies Ford suggest to preserve or enhance sales is to focus on customer loyalty, retention, and repeat business. These three areas can lead to lifelong consumers who spend an average of $300k on automobiles in their life time. That figure is far more than the one time customer. The strategy to retain these customers is to start a customer loyalty program with the purchase of their first vehicle and a frequent point's card to be used for service and free gasoline certificates. Repeat business is a hard concept to achieve because all the competition trying to take the customer from the competition. By the fact that these customers have purchased a vehicle from Ford Motor Company shows an advantage in that they get the first opportunity to retain them. That is why the customer loyalty and retention program are so important (AIADA, 2008). Continuing steps to remain in an optimal competitive position will require a refocus on the advertising campaign where Ford will focus on fuel efficient vehicles such as hybrids and economical gas and alternative fuel cars. Ford will slowly move away from the current advertising campaign which is focused on performance and gas guzzlers (AIADA, 2008). As the market demand changes to fuel economy, this advertising shift will help public reputation, which may give Ford an advantage relative to competition. This will help promote sales by aligning the company with the public's demand for less cost in driving the automobile which is directly attached to its complements, i.e. gasoline, insurance, and licenses. Overall, the market structure component examines the industry market structure comparative to who benefit in a pure competition, the dynamics of this type of competition, market structure pricing, non-price strategies to improve sales, and suggestions to competitive and gain market share (AIADA, 2008).Impact of New Companies Entering the MarketImpacts of new companies entering the market are significantly decreasing the sales of domestic automotive sales. Chery and Geely are prime examples of automotive companies in China planning on importing cars to the U.S that will be priced under $10,000. Consumers will be thrilled, but it could be devastating to Ford. New foreign automotive businesses entering the market in the near future will have a huge impact on domestic automotive businesses (Eaton Corporation, 2007). The new business entering the U.S....

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